People’s Bank, whose headquarters are located at 850 Main St. in Bridgeport, uses in-house staff members on a periodic basis to assess different levels of customer interaction.

While integrating a “mystery shopper” into a bank’s customer queue is increasingly being used as a way for banks to gauge customer service performance levels, banks can have a tendency to overuse the services.

Mystery shopping is common in the retail and fast-food industries. A fake shopper is hired to enter the store and take inventory of the responsiveness and attitudes of sales associates, corporate culture, cleanliness and organization of the store, and judge the ease and flexibility in the overall shopping experience. The goal is to identify areas of strength and areas that need improvement to ensure overall customer satisfaction, help define corporate culture and gain a competitive advantage in the marketplace.

And although not widely discussed, the mystery shopping programs are becoming prevalent in the Connecticut banking industry.

“The shopper survey is a great tool to take a look at the level of service and sales skills usage that a staff is using when interacting with customers,” said Bob Swanick, chief executive officer of Fairmont, a shop services provider based in Frederick, Pa., that also operates in Connecticut. “It should be a bank-wide measurement of how the bank is doing.”

Swanick said the mistake that banks often make is they use shopper surveys to monitor individual performance, using the results to coach or reprimand individuals.

“You need enough of a sample size so you get a reliable measure of performance. Company-wide you can get a sample that shows, on average, where your organization is. But to just look at what an individual does on any given day, that’s really only five minutes out of a given year. It might be their best, worst or average day,” said Swanick.

He noted that at least 10 “shops” need to be conducted on an individual within a 60-day period to get an accurate reading of their performance, and that individual performance is often better monitored by managers or branch coaches.

“A shopper survey gets the measure of a how a bank is doing. The manager observes the individual employee,” he said.

“We continually monitor our branches,” said Brent DiGiorgio, spokesman for Bridgeport-based People’s Bank. “We have a goal of providing customer service that exceeds customer expectation, and we want to make sure that we’re delivering on our promise.”

People’s uses in-house staff members on a periodic basis to assess different levels of customer interaction. Timeliness, product knowledge and greetings are examples of skills measured by People’s shoppers.

“We’re like most banks,” said DiGiorgio. “All the banks do this because it’s a good way to ensure a certain level of customer service.”

He was quick to stress, however, that People’s shoppers evaluate branch performance, and not individual performance.

“We make sure that all employees in a particular branch meet the level of service we expect,” he said.

Fairmont employs its own staff of trained shoppers. They enter a bank and generally request a service, paying careful attention to the skills used and not used. Often a bank will ask for a specific service situation to be monitored. Regardless of the situation, the shopper retains the same financial and personal profile.

However, that can result in problems for the shopper. With increased technology and the prevalence of online banking, it has become harder for shoppers to open accounts.

“If you have one shopper going to different branches, it will pop up on the bank’s system and you can have security problems,” said Swanick.

Another mistake that banks often make is asking secret shoppers for their assessment of individuals or of the general bank experience. The shopper, however, is supposed to impartial.

“A shopper shouldn’t provide an assessment of the skills they’ve observed. They should be a pure conduit for information without passing judgment,” said Swanick. “Sometimes banks use shoppers as a customer satisfaction survey, but that doesn’t provide good information for the bank. They’re using the value judgment of someone who isn’t really a customer of the bank and has totally different standards.”

Possible ‘Overkill’

What a bank does get from a shopper survey is a series of very specific information on the skills that its employees use. Whether the employee stood up, shook hands, used a customer’s name – those actions are all observed and recorded. Everything from the products presented to the follow-up preparation after the sale is noted by the shopper as part of the overall survey.

As an example, Swanick explained that in 35 percent of bank transactions, the employee determines whether the customer is a regular customer of the bank. That means in 65 percent of transactions, the customer is treated as a new customer each time, regardless of his prior relationship with the bank.

“A shopper may get treated as if they are new to the organization even through they have an account,” said Swanick. “So that’s one of the things we track. Do the employees find out if our shopper has a relationship? Do they find out what the shopper thought of their account and what they didn’t like about it?”

As part of a larger “customer focus” program, the results of a survey are used to evaluate the customer service performance of frontline tellers and customer service representatives, as well as bank mortgage, small-business and customer service call-center areas. In addition, the shops are used to identify holes or gaps in a bank’s overall service plan.

“The shop program creates a corporate culture and, to me, that is the lion’s share of why you would do a program like this … it creates a great amount of internal communication,” said Frank Aloi, president of Andover, Mass.-based ath Power Consulting Corp., a $3 million consulting firm that provides strategic cultural direction for service-based companies through research, planning and training systems, for their mystery shop programs. “What happens inside the bank [after the analysis] is much better coaching and general management practices. Realistically, the day-to-day supervisors are really the people who make or break corporate culture initiatives, so if they understand why the program is the place, it makes the bank work.”

Aloi said the mystery shop program is customized for each different bank, depending on the goals the bank sets. “If the goal is to open X more checking accounts this year, your shop program should be focused on achieving that goal,” he said.

Banks use the mystery shop program when they want to increase the consistency of service provision and in the way banks actually sell to a customer, but Aloi maintains that mystery shop scores are not the “end all and be all.”

“It just provides consistency,” Aloi said.

Aloi said the shops are also used to identify employees who meet the current benchmark requirements of a shop. Employees who score a perfect 100 percent when providing services to a mystery shopper are rewarded with a gift basket and recognized at their branch by management for their customer service savvy and attitude.

“This is a nice surprise for the employee as they generally have no idea they have been ‘shopped,'” said Aloi.

Swanick said that Fairmont has been able to correlate the relationship between employees’ skills and productivity. The company takes the information on individuals that have been shopped several times and tracks the data on how many accounts and services they sold. Using the information from shopper surveys, Fairmont can track what skills were working best and which didn’t work at all.

Still, banks have a tendency to overuse the shopper survey. Swanick said the best approach is to shop semi-annually and, at the very most, quarterly.

“Even quarterly may be overkill,” he said. “If you act on the data you receive from the first quarter it will be three more quarters before you see results. It takes that long to get a plan into place and implemented.”

Some banks shop monthly, which Swanick said he sees as a bad method of trying to control performance through shopper survey. A monthly inspection has a negative impact on employee morale, where employees are more concerned about getting a good shop survey than dealing with customers.